Examination of witnesses (Questions 135-139)|
TUESDAY 6 FEBRUARY 2001
135. Good morning. Can I welcome you to the
second session of the Committee's inquiry into the draft Water
Bill. Is there anything you want to say by way of introduction?
(Ms Taylor) If I may say something that
will last less than two minutes, Water UK is the industry association
which represents all the water companies in England and Wales
and the public water authorities in Scotland and Northern Ireland.
We are very pleased that you have decided to hold your own inquiry
into the draft Bill and we are very pleased to have this opportunity
to answer questions about our evidence. We believe that a new
Water Bill is needed now to set a coherent national water strategy
after an open debate with all our stakeholders. The aim of the
strategy should be long-term sustainability and we mean sustainability
in its fullest sense covering economic, social and environmental
objectives. In the water industry, we have to meet objectives
in all three areas of sustainability and, as you will indeed know,
striking the right balance can, of course, lead to disagreements
between all parties in the absence of an overall strategy. We
are keen that the Water Bill should lead to better and more consistent
regulation in the interests of all our stakeholders, whichever
set of objectives those stakeholders' interests may hold, and
that is why we have drawn particular attention in our evidence
to the regulatory regime and also the proposals for changes to
abstraction licences. In conclusion, although we would like to
see some improvements to the draft Bill, of course, we feel that,
as Water UK, we have a responsibility to work constructively and
we intend to work constructively both with your Committee, with
the DETR, and of course with our regulators.
136. That is an interesting introduction. You
have been admirably diplomatic in that statement. Perhaps you
could tell us what your opinion is of the proposed new regulatory
regime for Ofwat and its associated bodies in the draft Bill?
(Ms Taylor) I think what we would like to see is an
improvement in terms of regulation in general. Nobody would say
that the outcome of the last price review, the last periodic review,
was entirely satisfactory. There were conflicts that were not
resolved and there were disagreements and misunderstandings, not
just up until the end but after the end as well, and that can
hardly be a definition of a perfect process. The Environmental
Audit Committee, indeed, made some recommendations for the way
forward. Certainly, as far as we are concerned, we would like
to see this Bill take the opportunity to look at matters that
need to be addressed and to take those points forward and we feel
that at the moment, as the Bill is drafted, it is missing an opportunity
in terms of looking at what needs to be done in terms of bringing
the regulators together through the DETR, if you like, holding
the ring. So we feel an opportunity is being missed at the moment
in terms of the Bill and the way it is laid out.
137. Does that mean you are unhappy that the
Regulator will remain as an individual?
(Ms Taylor) No, we are not necessarily particularly
concerned one way or the other as regards the Regulator being
an individual or has a panel or is a panel or whatever. What we
would like to see is clarity as regards the way in which that
is set up, whatever is set up. If we look back to Ofwat in the
past where there was a panel of industrial advisers to the Regulator,
Ian Byatt as it was then, we do not know what advice was given
by those people: we asked repeatedly for whatever advice they
gave to be made available to everybody, not just to us, and it
never was. So certainly, as far as we are concerned, we believe
that what we need is claritynot just for the water industry
but for everybody who has an interest, all of the stakeholders.
138. Have you had a chance to review Dr Helm's
evidence to the Committee last week?
(Ms Taylor) Yes, we have.
139. What is your view? Dr Helm was extremely
clear on this point, and I have to say so far you do not seem
to be entirely clear as to exactly what structure you would like.
He was very clear that what is proposed in the Bill is the worst
of all three options which is a compromise between having a board,
which was his preferred option, or an individual properly empowered.
What is the view of Water UK?
(Ms Golay) Our view is that this matter is not as
important as the output of regulation, and there are risks if
you complicate regulation, with too many bodies and overseeing
commissions, that indeed the matter might become too complicated
but eventually what we are interested in is the way regulation
is carried outthe decision-making processes, whether they
are transparent and whether they take account of the consultations
they engage in, and whether the outcome is clear when it is delivered.